Logistics Sector Potential Economic Impact Highlighted Ahead of UK Budget
A 1% increase in logistics’ share of the economy could attract £30bn of foreign investment, according to a new report from trade association Logistics UK.
The report, released ahead of the upcoming UK budget, demonstrates that the logistics industry currently underpins £356bn of economic activity, 5.3m jobs, and £65bn in tax revenues nationwide. Furthermore, the sector enables more than £1trn of international trade annually. Capital Economics carried out the research for the trade association, quantifying the financial relationships between freight networks, supply chains, and broader macroeconomic performance.
Supply Chain Multipliers and Regional Value Generation
Every £1 of economic activity generated directly by the logistics sector more than doubles its value, providing an additional £1.04 across the wider economy through supply chains and employee spending. Logistics UK chief executive Ben Fletcher stated that the industry essentially doubles invested money, pointing out that spending by logistics businesses with UK suppliers supported over £90bn of gross added value (GVA) and 1.5m jobs in 2024.
Five distinct industries experienced GVA boosts exceeding £10bn each from logistics supply chain activity:
- Transport
- Administrative services
- Professional services
- Finance
- Manufacturing
In addition to supply chain impacts, personal spending by logistics employees contributed another £90bn in GVA and supported 1.1m jobs in 2024.
Infrastructure Resilience and Foreign Direct Investment
The analysis establishes a direct link between efficient supply chains and foreign direct investment, which serves as a primary driver for national productivity and innovation. International companies direct capital toward markets featuring reliable transport networks, warehousing capacity, and efficient ports and airports.
Ben Fletcher noted that international corporations invest where goods move efficiently because reliable networks reduce costs, increase profit margins, and expand market access. Logistics UK maintains that government policy must prioritize establishing the capacity and infrastructure necessary to secure investment from both domestic and international sources.
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